VZCZCXRO8831
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3028/01 3040802
ZNR UUUUU ZZH
R 300802Z OCT 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 8404
INFO RUCPDOC/USDOC WASHDC
RUEHFK/AMCONSUL FUKUOKA 0686
RUEHNAG/AMCONSUL NAGOYA 8751
RUEHNH/AMCONSUL NAHA 3044
RUEHOK/AMCONSUL OSAKA KOBE 4469
RUEHKSO/AMCONSUL SAPPORO 1259

UNCLAS SECTION 01 OF 05 TOKYO 003028 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN EAGR PREL SENV JA
SUBJECT: Japan Economic Scope for October 27, 2008 
 
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 
 
¶1. (U) This cable contains the Japan Economic Scope for 
October 27, 2008. 
 
Business 
-------- 
 
¶2. (SBU) Japan to Start Voluntary Carbon Footprint Labeling with 
Domestic Companies 
 
The Ministry of Economy Trade and Industry (METI) plans to start an 
experimental voluntary carbon footprint labeling program in early to 
mid 2009 involving approximately 30 domestic companies.  Industry 
associations will design the basic methodology for computing the 
carbon footprint of different product categories, subject to review 
by an expert GOJ panel.  METI will try to harmonize the 
methodologies used with an eventual ISO international standard in 
three years.  U.S. industry is concerned about the accuracy of the 
labeling and its possible trade-distorting effects. 
Environment and Energy 
---------------------- 
 
¶3. (U) JAEA Forecasts Decreasing Oil Dependence, Increasing Nuclear 
Power Use 
 
The Japan Atomic Energy Agency's (JAEA) "Nuclear Power Vision 2100" 
report forecasts a decrease in oil dependence and a substantial rise 
in nuclear power.  The October 2008 report forecasts a 42 percent 
drop in energy consumption by 2100 compared to 2000, resulting from 
a decline in population (falling to just over 64 million by 
century's end) and improved energy conservation.  Notably, the 
report forecasts significant cuts in energy consumed in the 
transportation sector, crediting the advent of hydrogen fuel-cell 
and rechargeable battery-powered vehicles.  The JAEA predicts 
Japan's energy sources will shift from fossil fuels, which is 
projected to fall to 28 percent (currently 75 percent), to 
electricity, which is expected to rise to 62 percent (currently 28 
percent).  To meet this growing electricity demand, the report 
forecasts an increase in nuclear power generation, with number of 
nuclear power plants increasing to 231.  Nuclear power's share of 
the electricity supply will grow to 67.1% and, significantly, teh 
report forecasts zero dependence on oil for power generation. 
 
Food and Agriculture 
-------------------- 
 
¶4. (SBU) Agriculture Featured on NHK's "Global Food Crisis" 
 
Japan's national television station, NHK, featured U.S. agriculture 
in a two-part series on the global food crisis aired October 18-19. 
NHK interviewed U.S. Grains Council executives, who featured 
prominently in the piece.  The program delved into America's role in 
the current international food situation, which it likened to the 
global financial crisis, asserting both stem from the U.S. policies. 
 In addition, the "ethanol boom" was again singled out as a major 
cause of the world's troubles. 
 
The program stated the U.S. began exploring new markets for U.S. 
grain products in the 1980s and promoted trade liberalization around 
the world, starting with Japan.  As U.S. grain exports increased 
rapidly, so did other countries' dependence on U.S. grain.  While 
NHK rightly pointed out many governments have restricted food 
exports during the crisis, the program asserted the global food 
crisis has taught Japan its overdependence on food imports must be 
reversed.  It also failed to highlight the U.S. role as a reliable 
supplier throughout the food crisis. 
 
The program's second installment focused on Japan's struggle to 
secure a stable supply of low-cost food amid soaring global food 
prices, featuring a miso maker in Japan struggling to purchase 
soybeans.  The program noted global farmland is expected to increase 
by only eight percent over the next 30 years from 2000, while global 
demand for food is expected to increase by 56 percent during the 
same period.  Countries are therefore trying to increase crop yields 
by using biotechnology.  The piece could help build eventual public 
acceptance of biotechnology, an improvement from past 
agriculture-related Japanese TV programming.  Looking at Japan's low 
food self-sufficiency rate, the program also reported on efforts to 
boost the production of feed-use rice as an alternative to corn 
imports. 
 
¶5. (U) USDA: Health Ingredients Japan 2008 Exhibition 
 
 
TOKYO 00003028  002 OF 005 
 
 
Benefiting from the continuing consciousness about health in the 
Japanese food sector, U.S. exhibitors at the Health Ingredients 
Japan 2008 Show displayed a broad range of products to over 42,200 
visitors.  Products ranged from food ingredients, nutraceuticals, 
processing/testing equipment, and health foods featuring functional 
attributes and organically grown ingredients.  U.S. Embassy 
Agricultural Trade Office Tokyo sponsored the U.S. Pavilion with 
nine booths, including an information booth and lounge, and featured 
six exhibitors, including three cooperators (the Wisconsin Ginseng 
Board, California Fig Advisory Board, and the Cherry Marketing 
Institute). 
 
¶6. (SBU) AMS Discusses Organic Recognition with MAFF 
 
USDA and Agricultural Marketing Service (AMS) officials visited 
Tokyo October 15 - 17 to review the GOJ's accreditation system for 
certifying agents that comply with National Organic Program (NOP) 
standards.  The AMS met with Ministry of Agriculture (MAFF) 
officials, visited the Food and Agricultural Materials Inspection 
Center (FAMIC), and organic green tea farms in Shizuoka prefecture. 
AMS plans to release a report in a few weeks suggesting areas for 
improvement.  Japan plans to export organic green tea to the U.S. 
 
 
¶7. (U) ATO Hosts Biannual Cooperators Meeting 
 
The Agricultural Trade Office (ATO) on October 20 gave presentations 
on the upcoming re-launch of the www.myfood.jp food image campaign 
and the newly launched "V5 Healthy Eating" campaign.  Japan is home 
to 49 cooperators with a requested $30.8 million in Market Access 
Program funding for 2009. The ATO presents seminars twice a year to 
share information and develop mutually beneficial programs.  The V5 
campaign is designed to support all cooperators by promoting the 
concept of "meal salads" to trade and consumers and creating recipes 
for websites, print, and television using a wide range of 
ingredients.  These two campaigns are key components of the ATO's 
efforts to provide platforms for cooperators to promote their 
products in the Japanese market. 
 
¶8. (SBU) Hokkaido Meeting on Revising Biotech Crop Regulations Lacks 
Focus 
 
The Hokkaido Prefectural Government (HPG) hosted the first in a 
series of seven opinion exchange meetings on food safety and 
security on October 7.  The HPG promised a focused discussion on 
whether to revise its three-year old biotech crop regulations (due 
for renewal in 2009; see 2007 Sapporo 29).  Ten panelists selected 
from various occupations such as consumer entities, school lunch 
nutritionists, local fishery coops, processed food companies, 
farmers, village agricultural sections, as well as thirty government 
officials and about fifty members of the public, attended the 
kickoff meeting in Sapporo.  The meeting was divided into three 
sections:  HPG reports on the current status of various activities 
under prefecture ordinance regarding food safety and security, 
reactions from each of the ten representatives, and finally opinions 
from those attending in the audience. 
 
The actual focus, however, was extremely vague.  Panelists raised a 
broad spectrum of food safety issues, very few actually related to 
biotech.  In fact, biotech crops came up only during initial 
presentations when HPG representatives reported no farmers or 
research institutions had submitted any requests to grow biotech 
crops since the 2006 implementation of Hokkaido's regulatory regime. 
 During open discussions, the meeting turned into verbal battle 
between biotech supporters and opponents over the safety of biotech 
crops.  The meeting ended with a consumer rights representative 
declaring "consumers will only accept biotech if these crops are 
scientifically proven to be absolutely safe to consume." 
 
¶9. (SBU) MAFF Official Assigned To "Tainted Rice" Reform Team 
Commits Suicide? 
 
Media organizations recently reported a MAFF official in charge of 
the Plant Protection Division and the Food Safety and Consumer 
Affairs Bureau hanged himself in his home on Friday afternoon. 
Police suspect the official, Director Yoshiro Tokura, committed 
suicide, according to the press.  Although Tokura was not directly 
involved in the tainted rice scandals, he was assigned to a newly 
established team of MAFF officials to address the issue.  A senior 
MAFF representative was quoted in Mainichi as saying it is unclear 
whether the suicide was related to the tainted rice scandals.  Some 
media report the alleged suicide was more likely the result of 
family problems. 
 
 
TOKYO 00003028  003 OF 005 
 
 
Japan's Foreign Relations 
------------------------- 
 
¶10. (U) JICA President Visits Washington 
 
Cooperation Agency President Sadako Ogata explained advantages she 
expects to flow from the recent reorganization of aid institutions 
in Japan, in which the Japan Bank for International Cooperation was 
recently folded into the Japan International Cooperation Agency 
(JICA).  Her October 14 speech in Washington at a conference 
co-hosted by JICA and the World Bank came just two weeks after her 
organization effectively became the world's largest bilateral 
development agency. 
 
For the first time, a single agency will be able to provide "a 
complete package of assistance," including technical help, grant 
aid, and soft loans for medium to long-term development.  She also 
highlighted the recent establishment of the JICA Institute, which 
will attract both domestic and foreign scholars to explore 
development assistance issues.  Ogata spoke about how her expanded 
agency can collaborate with other partners to fight poverty, 
especially in Africa. 
 
¶11. (SBU) Aso-Singh Pledge Accelerated EPA Talks 
 
Prime Minister Aso and Indian PM Manmohan Singh concluded their 
summit in Tokyo with no announcement of an Economic Partnership 
Agreement.  The leaders instead issued a joint statement affirming a 
Strategic and Global Partnership that calls for concluding an EPA as 
early as possible.  In a press interview, PM Singh expressed hope an 
agreement could be concluded by the end of the year, though analysts 
cited the need to simplify procedures for generic drugs and the 
removal of tariffs on auto parts as significant obstacles.  The 
Aso-Singh statement also announced a 450 million yen ODA loan for 
the first phase of the Delhi-Mumbai Dedicated Freight Corridor rail 
project.  Japan is going ahead with the low-interest loan despite 
U.S. and other OECD partners' objections that the project is 
commercially viable and incompatible with OECD tied aid rules. 
 
¶12. (U) MOFA Hosts 4th Israeli-Palestinian Confidence-Building 
Conference 
 
The Ministry of Foreign Affairs will host the Fourth Conference for 
Confidence-Building between Israel and the Palestinians October 22 - 
23 in Tokyo; it last convened in March 2007.  The chief Israeli 
delegate, Minister of the Interior Meir Sheetrit, and chief 
Palestinian delegate, PLO Negotiations Head Dr. Sa'eb Erekat, will 
attend the conference with other government officials and academic 
experts from both sides who are familiar with the Middle East Peace 
Process and the local situation. 
 
The Conference aims to exchange views on the status of the Middle 
East Peace Process, prospects for the development of the Palestinian 
economy, perspectives on the "Corridor for Peace and Prosperity" 
initiative, and the feasibility of a comprehensive Middle East 
peace, and other topics for peaceful coexistence between Israelis 
and Palestinians.  The conference represents one of Japan's policy 
pillars for promoting the Middle East Peace Process. 
 
¶13. (U) Japan-China-South America Trilateral Summit Dates Floated 
 
Prime Minister Aso floated December 6 or 7 as potential dates for 
Japan to host a trilateral summit between Japan, China, and South 
America, according to media reports.  Japan postponed the summit, 
originally scheduled for September, following the resignation of PM 
Fukuda.  Potential agenda topics for the meeting, which could be 
held in Fukuoka, include the financial crisis, climate change and 
the DPRK's nuclear program.  The timing of the proposed summit calls 
into question earlier media predictions of a November 30 Lower House 
election. 
 
¶14. (U) Japan Urges IMF, World Bank to Help Affected Poor Nations 
 
Japan called on the IMF and the World Bank October 13 to implement 
steps to help developing economies affected by the ongoing global 
financial turmoil and pledged support for the two institutions' 
endeavors to that end.  Bank of Japan Governor Masaaki Shirakawa 
told a plenary session of the IMF/WB annual meeting in Washington 
the IMF should provide financial aid to help emerging and smaller 
countries inject capital into their financial institutions and 
guarantee deposits amid the credit crisis.  He also urged the WB to 
contemplate how it could compensate for expected declines in private 
capital flows to developing countries due to the global credit 
crunch.  "Japan stands ready to supplement needed funds," Shirakawa 
 
TOKYO 00003028  004 OF 005 
 
 
said, in reference to the envisaged IMF aid. 
 
He also expressed expectations that the WB and the new JICA "will 
make their aid more effective and efficient and produce robust 
results by means of an exchange of best practices and know-how and 
its close coordination and cooperation." 
 
¶15. (U) Japan's ODA Budget Requests Total 771.87 Billion Yen, up 
10.2 Percent 
 
Budget requests for Japan's foreign aid in fiscal 2009, starting 
next April, total 771.87 billion yen (about $7.72 billion), up 10.2 
percent from the initial fiscal 2008 budget, the Ministry of Foreign 
Affairs (MOFA) announced October 8.  Despite the government's hope 
to expand aid, including a pledge to double official development 
assistance to Africa by 2012, negotiations with the Finance Ministry 
are expected to be tough given the overall tight fiscal situation. 
Ten of the 13 government ministries and agencies involved are 
requesting budget increases for their respective Official 
Development Assistance (ODA) expenditures. 
 
MOFA, which considers ODA one of Japan's most important diplomatic 
tools, made the largest request, 500.62 billion yen (about $5 
billion), up 13.6 percent, followed by the Finance Ministry at 
174.65 billion yen (about $1.75 billion), up 0.3 percent.  Japan's 
ODA budget has been cut for nine straight years.  This situation has 
led Japan, formerly the world's largest donor, to be surpassed by 
Germany and France in 2007, and to drop to fifth place among 22 
major donors in terms of ODA disbursements.  The Cabinet's final 
approval of the budget is expected in December. 
 
¶16. (SBU) For Now, No Nuclear Talks With India (SBU) 
 
Japan has no concrete plans to begin negotiations with India on a 
bilateral civil nuclear cooperation agreement, according to MOFA 
officials.  Officials did not preclude the possibility Japan will 
engage with India at a later date, but said for now the best Japan 
can do is to not oppose the Nuclear Suppliers Group exception that 
has been carved out for India.  The Nikkei reported October 20 PM 
Aso would discuss Japan's position on the issue with visiting Indian 
PM Singh on October 22.  Commenting on the press report, MOFA 
officials said that the topic is "still under consideration" as an 
agenda item for the PM's discussions. 
 
Politics and Reform 
------------------- 
 
¶17. (SBU) GOJ And Local Officials Launch Commission To Plan For Land 
Use After Base Realignment 
 
In another sign local Okinawan officials believe the DPRI base 
realignment plan will be implemented, a GOJ-funded commission was 
launched October 22 to work with local governments to develop 
recommendation for future disposition of lands returned as part of 
the southern consolidation and U.S. military facilities.  An 
initiative of the Prefectural Government, the commission includes 
representatives of two base-hosting cities (Ginowan and Chatan), 
several Tokyo-based urban planning experts and representatives of 
the Cabinet Office and the Okinawa Prefectural Government. 
 
Technology, Telecom, and IPR 
---------------------------- 
 
¶18. (U) An Incremental Victory On Japan IPR Enforcement 
 
A Cultural Affairs Agency study committee has issued a draft report 
recommending the copyright law be revised to make illegal the 
downloading of illegal content or content from illegal sources.  The 
step follows U.S. regulatory reform recommendations noting the 
weakness of Japanese law if distribution is illegal but downloading 
and possession are not.  A Cultural Affairs Agency contact advised 
the committee's final report should be published before year's end. 
The Agency has started preparations to revise the copyright law. 
 
¶19. (U) NIMS Hosts Young Scientists on Nano Mechanics 
 
The National Institute of Materials Science (NIMS) hosted the 
U.S.-Japan Young Scientists Symposium on Nano Mechanics-related 
Active Systems October 8, 2008. The National Science Foundation 
(NSF) and Ministry of Education, Culture, Sports, Science and 
Technology (MEXT) supported the event as part of the "U.S.-Japan 
Nanotechnology Program" established in 2003. 
 
Symposium participants included 12 U.S. researchers, 13 Japanese 
 
TOKYO 00003028  005 OF 005 
 
 
researchers, and representatives from the host institution, MEXT and 
NSF.  The symposium program consisted of three sessions, a tour of 
the NIMS, research presentations, and a reception/dinner.  The 
research talks focused on nano tools, hybrid nanomaterials, and 
nano-biomedical materials and devices.  The U.S. team praised the 
first-rate facilities and the research conducted by the Japanese 
institutions. 
 
In addition to participating in the symposium, the U.S. team visited 
the University of Tokyo, AIST (National Institute of Advanced 
Industrial Science and Technology) in Tsukuba Science City, Kyoto 
University, and Osaka University. 
 
Trade 
----- 
 
¶22. (SBU) GOJ Ponders "High Risk" Chemical Registration Law 
 
Japan is considering legislation to require chemical companies to 
register the manufacture and import volume of certain products, 
according to a front-page Nikkei article today.  A health ministry 
official told us this law will not be as expansive as the EU REACH 
Directive, although it will be "loosely based" on REACH 
(Registration, Evaluation and Authorization of Chemicals).  The 
official further indicated the new legislation will focus on 
chemicals considered high risk, and that its list of monitored 
chemicals should be considerably shorter than that established under 
REACH. 
 
¶23. (SBU) GOJ Finalizes Domestic Trial Emissions Trading Scheme 
 
The GOJ finalized details of its voluntary trial emissions trading 
scheme and began recruiting participants October 21, according to an 
MOE contact.  Recruitment will continue until mid-December, but 
trading will not start until late 2009.  The delay allows time for 
the trading scheme's Secretariat (comprised of METI, MOE and other 
agencies' officials) to verify the self-selected targets of the 
participating companies.  The MOE contact confirmed press reports 
that over 1,000 companies are likely to participate. 
 
SCHIEFFER